Pivot low across risk assets prior to December’s CPI Report

Futures displayed an upward trend on Tuesday morning after a downturn in the market the previous day, during which the Nasdaq Composite recorded its fourth straight decline in regular trading. The price actions from the prior day suggested a possible reversal, as short sellers began to close their positions and cautious investors opted to sell. Traders keeping an eye on the SPY ETF noted that the election gap had been filled, establishing new pivot low prices for reference. Meanwhile, QQQ traders witnessed a brief dip below 500, which was followed by a robust reversal, closing above 505. Although the initial 'Trump bump' has faded, Tampa Shores Capital (YTD 6.7%) sees a chance for its comeback ahead of Donald Trump's inauguration, urging buyers to maintain control above yesterday's pivot low as we near Wednesday's CPI report.

Awaiting a reversal

On Monday, Nasdaq stock futures fell by more than 1% as investors brace for a week filled with important data, including the U.S. inflation report for December, which is expected to overshadow earnings reports from major banks. On Friday, the Nasdaq composite dropped 317.25 points, or 1.63%. As the impact of the stock market's 'Trump bump' fades, investors appear to be retreating, largely due to a selloff in bonds. A stronger-than-anticipated Consumer Price Index report on Wednesday could have a significant impact on U.S. bond prices, possibly prompting economists to reconsider the previously unlikely prospect of an interest rate hike by the Federal Reserve this year. Tampa Shores Capital (YTD 5.5%) predicts a neutral to negative trend for the Nasdaq this week and is closely monitoring signs of investor capitulation ahead of Donald Trump's inauguration.